Case 3:13-Cv-01110-DRD Document 69 Filed 09/30/13 Page 1 of 23 in the UNITED STATES DISTRICT COURT for the DISTRICT of PUERTO RICO

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Case 3:13-Cv-01110-DRD Document 69 Filed 09/30/13 Page 1 of 23 in the UNITED STATES DISTRICT COURT for the DISTRICT of PUERTO RICO Case 3:13-cv-01110-DRD Document 69 Filed 09/30/13 Page 1 of 23 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO Maritza Casiano-Cains Plaintiff Civil No. 13-1110 (DRD) v. College of Public Performance Producers, et. al. Defendants OMNIBUS OPINION AND ORDER The instant case stems from a constitutional challenge of the Puerto Rico College of Public Performance Producers Act, Law No. 113 of 2005, 15 L.P.R.A. §§ 2012 - 2020 (“COPEP Act”) and a request of declaratory judgment and injunctive relief. Plaintiff, a public performance producer, brought suit against the College of Public Performance Producers (“COPEP”), its current and former officials, a private entity that directly competes with of Plaintiff, the Commonwealth of Puerto Rico, and the Secretary of Justice, Secretary of Treasury and Governor of Puerto Rico. Plaintiff alleges that the COPEP Act violates the Commerce Clause and the First and Fourteenth Amendments of the U.S. Constitution as to its mandatory membership requirement; the allegedly differential treatment of “public performance producers established in Puerto Rico”; overbreadth and vagueness as to the activities subject to penalties under the COPEP Act; and the imposition of administrative and criminal penalties (Docket No. 5). Plaintiff requests that the COPEP Act be declared invalid and adding that the Court enjoins enforcement power over the same. Plaintiff further seeks damages for the monopolistic and anti-competitive acts allegedly perpetrated by COPEP, Mojena, TM Entertainment, Zapata, and Mellado; the selective prosecution allegedly perpetrated by COPEP, Mojena, Zapata and Mellado; the tortious interference with at least one contract allegedly perpetrated by Mojena, Zapata, and Mellado; and for being the the victim of defamation by Mojena, Zapata and Mellado. Pending before the Court are Plaintiff’s request for preliminary and permanent injunction (Docket No. 6) and Defendants’ motions to dismiss (Docket Nos. 40, 42, 53, 58, and 59). Case 3:13-cv-01110-DRD Document 69 Filed 09/30/13 Page 2 of 23 I. FACTUAL AND PROCEDURAL BACKGROUND Plaintiff has been a producer of public events established in Puerto Rico for various decades. She obtained a license to practice the profession of public performance promoter and also became a member of the COPEP when the statutes imposing such requirements were enacted.1 Both requirements are currently mandatory to all producers of public events established in Puerto Rico (“PR Producers”). PR Producers are subject to the imposition of administrative and criminal penalties if they practice the profession without a license and without being active members of COPEP. 15 L.P.R.A. § 2019. Producers of public events not established in Puerto Rico (“non-PR Producers”) are permitted to practice the profession in Puerto Rico provided they either obtain the license and become members of COPEP, or they become associated with a PR Producer that is both licensed and a member of COPEP. Should a PR Producer seek to practice the profession in Puerto Rico without having a license or becoming a member of COPEP, they do not have the option of associating with other PR Producers with a license and that are members of COPEP. 15 L.P.R.A. § 2012. During the time Plaintiff was a member of COPEP, Plaintiff disagreed with the manner the COPEP handled a dispute Plaintiff had with another member and she decided to discontinue her membership in COPEP. Since then, Plaintiff is no longer directly practicing the profession of public performance promoter, but rather she “has participated as an investor in events produced by other producers who are duly admitted as members of COPEP.” Docket No. 5, ¶ 47. Two such events include “a December 2011 concert of Pequeños Gigantes and a friendly soccer match between the Puerto Rico Team and the 2010 FIFA World Cup Champions, the Spanish Team, in August 2012.” (Italics in original). Docket No. 5, ¶ 48. 1 Persons desiring to practice the profession of public performance promoters are required to obtain a license and be registered in the Registry of Public Performance Promoters pursuant to the Public Performance Promoter Act, Law 182 of September 3, 1996, 15 L.P.R.A. §§ 2001 -2007. The licenses are issued by the Public Performance Promoters Services Office, an office created within the Puerto Rico Department of Treasury – the government agency responsible for regulating the profession. 15 L.P.R.A. § 2006. Further, public performance producers holding a license pursuant to Law 182 are required to become members of the COPEP pursuant to the COPEP Act. 15 L.P.R.A. § 2012. - 2 - Case 3:13-cv-01110-DRD Document 69 Filed 09/30/13 Page 3 of 23 After Plaintiff’s participation in the referenced events, COPEP and its officers began an investigation to determine if there were any violations to Law 182 or the COPEP Act. Plaintiff further avers that on December of 2011, COPEP referred the investigation of Plaintiff to the Departments of Treasury and Justice with intent to subject Plaintiff to administrative and criminal prosecution. Plaintiff categorizes COPEP’s investigations and referrals as “selective prosecution” because COPEP focused on Plaintiff’s activities regarding the December 2011 concert and the August 2012 soccer game, while overlooking the activities of other producers that deserved investigation by COPEP. Docket No. 5, ¶ 50. Other than a conclusory allegation as to the selective prosecution, Plaintiff proffers no additional information of the alleged investigations that were overlooked or the activities that would merit investigation by COPEP. Plaintiff accuses co-defendants Mojena, TM Entertainment, Mellado and Zapata of conspiring against her “for the sole purpose of monopolizing the business of large scale public performances” (Docket No. 5, ¶ 60). Plaintiff’s basis for this allegation is that these defendants “are [also] engaged in the business of public performance productions,” Docket No. 5, ¶ 57, and that as a result of the “combination and conspiracy” of COPEP, Mojena, TM Entertainment, Mellado and Zapata, Plaintiff’s “business volume has been considerably reduced, while the business of defendants Zapata, Mojena, TM Entertainment, Inc., Mellado [and other unknown persons] has greatly increased.” Docket No. 5, ¶ 62. Plaintiff avers that co-defendants COPEP, Zapata, Mojena, TM Entertainment, Mellado and other unknown persons “have made public statements about [Plaintiff] which are defamatory.” Docket No. 5, ¶ 63. As to Mojena, Plaintiff specifically alleges that while Mojena addressed the 2012 COPEP Assembly, he stated that Plaintiff defrauded the Government during the production of the soccer event of December 2012. Plaintiff also states that Mojena publicly accused Plaintiff of conspiring with another producer to cause damages onto COPEP and that such conspiracy led to the filing of a lawsuit in state court. Lastly, Plaintiff avers that Mojena “used his access to the media, including his television programs[,] to spread rumors and false information about [Plaintiff].” Docket No. 5, ¶¶ 64 thru 66. - 3 - Case 3:13-cv-01110-DRD Document 69 Filed 09/30/13 Page 4 of 23 As to Zapata, Plaintiff asserts that he “verbalized defamatory statements regarding [Plaintiff] in front of an audience, of mostly college students, in Universidad del Sagrado Corazón […] accusing her of acting in violation of state laws.” (Italics in original). Docket No. 5, ¶ 67. Plaintiff also states that both Zapata and Mellado sent email messages to a long-standing client of Plaintiff “to inform them that [Plaintiff] was not a member of COPEP, and therefore [that] it would not be advisable to be in business with her.” Docket No. 5, ¶ 71. Plaintiff claims that as a result of these messages, her client ended their business relationship “in favor of one of Mellado’s companies.” Docket No. 5, ¶ 72. Plaintiff filed the instant complaint challenging the constitutionality of the COPEP Act and requesting declaratory judgment and injunctive relief enjoining enforcement of the COPEP Act. Plaintiff also seeks damages for being subjected to monopolistic and anti-competitive acts, defamation, selective prosecution, and tortious interference with a contract with at least one client. The named defendants requested dismissal of the complaint and opposed Plaintiff’s request for injunctive relief on various grounds, including lack of standing to make a constitutional challenge of a state statute and failure to plead a cause of action under the plausibility standards of Twombly and Iqbal.2 II. INJUNCTIVE RELIEF The First Circuit uses a quadripartite test for determining whether litigants are entitled to preliminary injunction redress. Under this framework, trial courts must consider (1) the likelihood of success on the merits; (2) the potential for irreparable harm if the injunction is denied; (3) the balance of relevant impositions, i.e., the hardship to the nonmovant if enjoined as contrasted with the hardship to the movant if no injunction issues; and (4) the effect (if any) of the court’s ruling on the public interest. Swarovski Aktiengesellschaft v. Building No. 19, Inc., 704 F.3d 44, 48 (1st Cir. 2013) (citing United States v. Weikert, 504 F.3d 1, 5 (1st Cir. 2007). See also Charlesbank Equity Fund II, Ltd. P'ship v. Blinds To Go, Inc., 370 F.3d 151, 162 (1st Cir. 2004); Cohen v. Brown University, 991 2 Bell Atlantic v. Twombly, 550 U.S. 544 (2007); Ashcroft v. Iqbal, 556 U.S. 662 (2009). - 4 - Case 3:13-cv-01110-DRD Document 69 Filed 09/30/13 Page 5 of 23 F.2d 888, 902 (1st Cir. 1993); Narragansett Indian Tribe v. Guilbert, 934 F.2d 4, 5 (1st Cir. 1991); Camel Hair and Cashmere Institute of America, Inc. v. Associated Dry Goods Corp., 799 F.2d 6, 12 (1st Cir. 1986). All factors in this quadripartite test are important, however the First Circuit has been adamant that federal courts keep in mind that “‘the sine qua non of this four-part inquiry is likelihood of success on the merits: if the moving party cannot demonstrate that he is likely to succeed in his quest, the remaining factors become matters of idle curiosity.’” Sindicato Puertorriqueno de Trabajadores v.
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